This PPT slide, part of the 89-slide Customer Loyalty PowerPoint presentation, outlines a structured methodology for calculating Customer Net Present Value (NPV), emphasizing various components that contribute to understanding customer loyalty. It begins with the foundational step of creating the necessary bars, which serve as the framework for analysis.
Acquisition Cost is the first component, detailing the total expenses incurred in acquiring new customers. This includes advertising, direct marketing, and application processing costs, which are then averaged over the number of new customers to establish a baseline for initial investment.
Increased Spend focuses on analyzing customer spending patterns based on their tenure. This analysis aims to estimate the average contribution per customer, highlighting the importance of understanding how spending evolves over time.
The Other Product Purchase section emphasizes the need to evaluate customers' propensity to purchase additional products. By analyzing spending by tenure group, businesses can estimate incremental contributions from cross-selling efforts, which can significantly enhance overall customer value.
Reduced Operating Costs examines how costs associated with servicing customers can be adjusted based on tenure, further refining the contribution calculations.
Referrals are also a critical component, as they quantify the value generated through customer recommendations. Understanding the referral dynamics allows businesses to capture additional value from existing customers.
Finally, the Avoided Closure Costs section addresses the financial implications of losing customers. It includes all costs related to account closures and defection, providing a comprehensive view of the financial impact of customer retention strategies.
This methodology offers a detailed approach to quantifying customer loyalty and its financial implications, making it a valuable tool for organizations seeking to enhance their customer relationship strategies.
This slide is part of the Customer Loyalty PowerPoint presentation.
EXPLORE MORE SLIDES FROM THIS PRESENTATION
EXPLORE MORE PRESENTATIONS ON
Flevy is the world's largest knowledge base of best practices.
Leverage the Experience of Experts.
Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.
Download Immediately and Use.
Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.
Save Time, Effort, and Money.
Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.
